These days you hear a lot of complaining about online costs. People think “online” means “free.” It doesn’t; nor should it. So what is the cost of doing business online? In this post I’ll detail my software as a service expenses to give you an idea.
Software as a Service (Saas)
Software as a Service basically means you can get a service through a webpage. Wikipedia has a better definition. The point is, that digital space has a cost. Software over the cloud has a cost. Clouds are not free.
Traditional services like accounting and law typically charge retainers and charge by 15 minute increments. We never question this. So why not value our own time?
This also includes monthly, recurring costs like cable (internet provider), electricity (to power and charge the devices you use to get to the cloud), cell phones to work remotely and call clients, as well as a percentage of your mortgage/rent or co-working fees.
This isn’t the place for it, but please. Understand your costs as an agency. Understanding your costs allows you to charge for your value.
My Monthly SaaS Costs
I spend quite a bit of money for cloud-based tools that I deem necessary to run my Marketing Consultancy.
Here are my monthly costs rounded to the nearest dollar:
- Website Hosting at Pressable $25
- Postmatic (for content delivery and commenting) $20
- Dropbox (for website & photo backups) $10
- Backblaze (backup computer) $10
- iTunes (cloud storage) $4
- Hootsuite (manage client social accounts) $15
- Freshbooks (invoicing clients) $25
- Canva.com (making graphics) $15
The total amount I spend monthly on things specifically to run my business is $124.
This doesn’t include traditional services (utilities) like cable ($97), cell phone ($99), electricity ($40) , or the $350 I can legally write off of my rent for my home office.
If my math is correct, that’s $710 I need just to operate monthly.
With a 20% self-employment tax (that we all should be saving), a $1000 a month client only covers the cost of doing business.
We haven’t even talked about my time, just the fixed monthly nut.
The second and third, fourth and fifth clients start adding to the bottom line (profit).
Why am I writing about job costing and the cost of doing online business?
As someone who spent almost 15 years in construction accounting, it baffles me that the majority of WordPress freelancers don’t:
- Track their time (even as a sample to average out)
- Attach costs to jobs
- Find out their operating cost before determining pricing
It’s another blog post or WordCamp talk to properly give an overview, but the point is that costs are costs. Figure out what you need in your workflow and do it. If you can’t afford those tools, then charge more to your clients.
There is no such thing as a free lunch.
Nothing is free. Your time isn’t free. Even if you don’t have to pay for software (like WordPress.org), someone still has to implement it, you still have to design a site, and it still has to be hosted. A modern website requires at least three different businesses that will be paid just to have a free website.
Your business matters. Stop trying to do everything for free. Invest in your dream. No one else should care about your business more than you do.
Once you figure out your operating costs, feel free to reach out to me when you’re ready to add marketing.